Now in Bangladesh the demand for residential real estate unit is rapidly increasing. The current urbanization rate is 5-6% and 50% people will be living in the cities by 2025, according to experts. In the Dhaka City from 1991 to 2004 the urban population density has increased by about 79%. It was 4795 persons/sq.km in 1991 and 8573 persons/sq.km in 2004. Population is increasing rapidly in Bangladesh. The population in Dhaka, the mega city, is increasing very fast. This rapidly increasing people need more housing facilities. More and more increase in house rent implies that people would become less interested to stay in rented house and would try or tend to buy home. This is also increasing the demand of apartments in Bangladesh especially for the middle or upper middle class people in the society. This huge lift in the urban density and rush of the people to Dhaka city has created great demand of accommodation and housing services. Moreover the real estate developers have started targeting the middle-income groups in the last few years to sell apartments.
It is found that the supply of real estate is increasing along with its demand. But the cost of real is also in increasing mood due to inadequate land and high prices of raw materials. Government is also playing a critical role in this demand-supply-price playing.
Some recent Critical Factors are Real estate price is in Sky-fall, unsold apartments, break-even situation of real estate companies, and fall in Land Prices.
Though the price of the land has recently fallen down and many apartments are remained unsold, it cannot be said as “over-supplied.” Rather it can be said as demand-supply mis-matched. As we have discussed earlier, the demand of real estate is in increasing mood but due to the mispricing it is remained unsold. Proper policies and appropriate government directions can solve this crisis with the short term period.
Housing Sector Overview